Chap 10: Change management

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Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007

CHAPTER 10CHANGE MANAGEMENT

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Learning outcomes Identify the different types of change that

need to managed for e-commerce Develop an outline plan for implementing

e-commerce change Describe alternative approaches to

organizational structure resulting from organizational change.

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Management issues What are the success factors in managing

change? Should we change organizational structure

in response to e-business? If so, what are the options?

How do we manage the human aspects of the implementation of organizational change?

How do we share knowledge between staff in the light of high staff turnover and rapid changes in market conditions?

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Key change management issues

Schedule – what are the suitable stages for introducing change?

Budget – how do we cost e-business? Resources needed – what type of resources do we need,

what are their responsibilities and where do we obtain them? Organizational structures – do we need to revise

organizational structure? Managing the human impact of change – what is the best

way to introduce large-scale e-business change to employees?

Technologies to support e-business change – the role of knowledge management, groupware and intranets are explored.

Risk management approaches to e-business led change.

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The challenges of e-business transformation To help achieve change

Management buy-in Effective project management Action to attract staff Employee ownership of change

Figure 10.1 Key factors in achieving change

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The challenges of sell-side e-commerce

The 7S strategic framework Strategy Structure Systems Staff Style Skills Superordinate

Figure 10.2 Digital marketing activities that require management as sell-sidee commerceSource: E-consultancy (2005)

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Key Challenges of e-business marketing Gaining buy-in and budget Conflicts of ownership Coordination with different channels Managing and integrating customer info. Achieving a unified reporting Structuring the specialist digital team In-sourcing vs. outsourcing online

marketing Staff recruitment and retention

Figure 10.3 The main challenges of managing sell-side e-commerce (n = 84)Source: E-consultancy (2005)

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Different types of change

Incremental – relatively small adjustment

Discontinuous – major transformation Organizational – includes both

incremental and discontinuous Anticipatory – initiate change Reactive – direct response to change

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Business process management An approach supported by software tools

intended to increase process efficiency by improving information flows between people as they perform business tasks

Continuous, incremental change

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Discontinuous Process Change

Hammer and Champy (1993) defined BPR as:

the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.

Fundamental rethinking – re-engineering usually refers to changing of significant business processes such as customer service, sales order processing or manufacturing.

radical redesign – re-engineering is not involved with minor, incremental change or automation of existing ways of working. It involves a complete rethinking about the way business processes operate.

dramatic improvements – the aim of BPR is to achieve improvements measured in tens or hundreds of percent. With automation of existing processes only single-figure improvements may be possible.

critical contemporary measures of performance – this point refers to the importance of measuring how well the processes operate in terms of the four important measures of cost, quality, service and speed.

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Emerging of new concepts

BPR often linked to downsizing New terms emerged:

Business Process Improvement: Optimizing existing processes

Business Process Automation: Automating existing ways of working manually through information technology

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Planning Change

E-business projects need project governance

Effective project management must includes: Estimation Resource allocation Schedule/plan Monitoring and control

Figure 10.4 Stages in developing an e-business solution

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Differences with typical IS

The timescales for delivery of the system are compressed

The e-commerce system may be hosted outside

The focus of project is content and services

Once launched the site is more dynamic

Figure 10.5 An example web site development schedule for The B2C Company

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Prototyping

Rapid Simple Iterative Incremental User-centred

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Staff retention

Hackman and Oldham (1980): Skill variety Task identity Task significance Autonomy Feedback from employer

Figure 10.6 Typical structure and responsibilities for a large e-commerce teamSource: E-consultancy (2005)

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Outsourcing

Outside-in Inside-out

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Revising organizational structureFour stages of growth: Ad hoc activity Focusing the effort Formalization Institutionalizing capability

Table 10.4 Advantages and disadvantages of the organizational structures shown in Figure 10.7

Figure 10.8 Options for location of control of e-commerceSource: E-consultancy (2005)

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Approaches to managing change Collaborative – widespread participation

of employees Consultative – management take final

decisions Directive – the management team takes

the decisions Coercive – the management team takes

the decision with very limited recourse to employees

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Knowledge management – Saunders (2000)

Every day, knowledge essential to your business walks out of your door, and much of it never comes back. Employees leave, customers come and go and their knowledge leaves with them. This information drain costs you time, money and customers.

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Explicit and tacit knowledge Knowledge Management - Techniques and tools

for capturing and disseminating knowledge within an organization.

Explicit – details of processes and procedures. Explicit knowledge can be readily detailed in procedural manuals and databases. Examples include records of meetings between sales representatives and key customers, procedures for dealing with customer service queries and management reporting processes.

Tacit – less tangible than explicit knowledge, this is experience on how to react to a situation when many different variables are involved. It is more difficult to encapsulate this knowledge, which often resides in the heads of employees.

Figure 10.9 Knowledge management framework

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KM framework

1. Identify knowledge2. Create new knowledge3. Store knowledge4. Share knowledge5. Use knowledge

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IDC – Objectives of KM Improving profit/growing revenue (67 per cent) Retaining key talent/expertise (54 per cent) Increasing customer retention and/or satisfaction

(52 per cent) Defending market share against new entrants (44

per cent) Gaining faster time to market with products (39

per cent) Penetrating new market segments (39 per cent) Reducing costs (38 per cent) Developing new products/services (35 per cent).

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Binney – classes of KM applications

1. Transactional. Help desk and customer service applications.

2. Analytical. Data warehousing and data mining for CRM applications.

3. Asset management. Document and content management.

4. Process support. TQM, benchmarketing, BPR, Six Sigma.

5. Developmental. Enhancing staff skills, competencies – training and e-learning.

6. Innovation and creation. Communities, collaboration and virtual teamwork.

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Alternative tools for managing knowledge Knowledge capture tools, e.g. mind

maps Knowledge sharing techniques, e.g. chat Knowledge delivery tools, e.g. email Knowledge storage, e.g. database Electronic document management

system Expert systems

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Risk management1. Identify risks, including their

probabilities and impacts.2. Identify possible solutions to these risks.3. Implement the solutions targeting the

highest impact, most likely risks.4. Monitor the risks to learn for future risk

assessment.

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Activity – identify risks for e-business projectRisk Probability Impact Solution

Insufficient senior management commitment

5 7 Education/training/lobbying by e-business manager to achieve buy-in

High staff turnover/key staff leave

6 5 Use monetary incentives and improve working environment

Project milestones not met, overrun budget

8 6 Appoint experienced project manager and provide support and resources needed. Manager will perform risk management such as this

Problems with new technology delaying implementation (bugs, speed, compatibility)

8 8 Allow sufficient time for volume, performance testing

Staff resistance to change 4 4 Education, training identification of change facilitators amongst staff

Problem with integrating with partner’s systems (e.g. customers or suppliers)

6 8 Tackle these issues early on, identify one contact point/manager for each of partnerships

New system fails after changeover (too slow or too many crashes)

9 See solution to delayed implementation

Chap 10: Change management

Business

Transcript of Chap 10: Change management